HSBC has been wrongfooted by the deterioration in American house prices and
has written off an extra $400 million after its assumptions proved too
optimistic.

The setback contributed to a 60 per cent slide in North American profits in
the first quarter to March and a 14 per cent dip in group profits to $4.9
billion (£3 billion).

A drop in profits in investment banking after a bumper quarter last time and
the $440 million provision to pay compensation claims on mis-sold payment
protection insurance also contributed to the profits decline.